Level I

Have i messed this up?

Hi all just want to get some feedback and any possible advice you can give.

Have taken off 7 days until the exam on dec 6th and I’ve only just gone through the material twice and done half of all qbanks straight after each reading averaging 80%.

Let’s be honest - do I stand any chance with this and if I do, what further questions to hit first.

Yes I know I’ve left it late.. had other commitments. Continue reading

Coupon payment

Hi, please help to explain the below question and also the meaning of 8-5/8%. Thanks

The cum-coupon transaction price is 125-3/16 for a semi-annual pay, 8-5/8% coupon bond. 2 months have elapsed since the past coupon payment. What is the accrued interest on 2000 000 par value for this bond. 

Solution: (2/6)*(1/2)*(8-5/8%)*2000000 = 28750 Continue reading

CFAI Mock Exam vs CFAI "March" Mock Exam

For people who have taken both CFAI mocks, does the March mock have new questions compared to the other mock and practice tests?  I took the first mock and most of the questions were repeated from their practice tests so I didn’t really feel it was worth the time.  Thanks. Continue reading

Ethics Question - Doesn't make sense

Doug Watson, CFA, serves in a sales position at Sommerset Brokerage, a registered investment adviser. As part of his employment, he is expected to entertain clients. Frequently at these client outings, Watson drinks excessively. On one occasion, after dropping off a client, Watson was cited by local police for misdemeanor public intoxication. According to the Standard on knowledge of the law and the Standard on misconduct, Watson is in violation of:

a) Both standards

b) Neither standards

c) One of the standards. Continue reading

What are exactly soft commissions ?

Hi everyone, 

I have been reading so much things about Soft Dollars but i have to admit my failure to understand the concept. 

In the CFAI book is written that :

“Conflicts arise when an investment manager uses client brokerage to purchase research services that benefit the investment manager.”

So the investment manager purchases research from the client or the broker ? and with who’s money ? 
I thought that it was investment manager that paid brokerage with researches :-S Continue reading

Probability

Maybe it’s just late but I seem to be confusing some of the basics of probablility. For example if the event is the probability of a six appearing in 4 throws of a dice then shouldnt the outcome be (1/6)^4.

However if we use the laws of probability where the P(Event)=1-P(Not event) then the number got from 1-(5/6)^4 does not match with the first method.

It’s late in my defense but what am I missing here? Continue reading

Fair Value & Impairment Loss

Are Fair Value, PV of Future CF, and Value in use all used to assess impairment losses under both GAAP and IFRS? The “prescribed” answer to the impairment loss calculation was 60,000 because they chose to use fair value of the impaired asset. However, I had used the higher of Discounted Cash Flow. Is this not allowed under IFRS? alternatively, are costs to sell also subtracted from PVofFCF? Thanks. 

A  company using IFRS has experienced a decline in the demand for its products. The following information relates to the company’s equipment for this year: Continue reading

Converting YTM to EAY (and vice versa) for different periodicities

HI all,

Bit worried here, I’m struggling to easily convert YTM to EAY and vice versa for different periodicities without the use of the calculator. The logic is just not sinking in.

what is the easiest and quickest way to do and remember how to do this?

e.g. go from a quarterly YTM to a semi annual effective annual yield and then back again.

An urgent response and examples would be much appreciated.

Thanks Continue reading

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